How should Canada fund the blood system? An evaluation of the chargeback proposal.

The Canadian blood system is a critical interface between public health and the delivery of patient care. The organization of the blood system plays a vital role in ensuring that its functions are effectively fulfilled. Previous structural problems in the blood system led to serious health consequences by contributing to the blood transmission of hepatitis C and HIV in the 1980s. To address these problems, the Canadian blood system has recently undergone considerable organizational reform. However, policy-makers, particularly in Ontario, are considering further structural reform specifically focusing on how the blood system is financed. This move for reform is partially motivated by the rising cost of blood products and the perception that the current system has failed to provide incentives for the efficient use of these products. The suggested payment mechanism, a "chargeback system," involves the provincial ministries of health funding hospitals so that hospitals can directly purchase blood products from the Canadian Blood Services. This approach would replace the current system in which the provinces directly fund the Canadian Blood Services, which in turn provides blood products free of charge to hospitals. Based on a review of documents and stakeholder interviews, we report the potential advantages and disadvantages of a change to a new system of funding and make recommendations on how provinces should proceed.